Catalina: A Technological Breakthrough In early 1994, ASDA, the Supermarket chain, installed a new checkout device in over a hundred of its stores. This device (known as Catalina), a sort of 'electronic spy', identifies the brand names of the products purchased and issues on-the-spot discount coupons for competing products to be redeemed on the next shopping trip. The Daily Mail's consumer affairs correspondent, Vikki Orvice, said, "If, for example, a customer buys Pepsi, its rival, Coca-Cola, could (if it has bought access to the system) retaliate by offering a voucher with discounts on Coke for their next visit." Catalina can also be used to promote ASDA's own-brand products, to reinforce purchasing habits by issuing same-brand coupons or to sell across the manufacturer's range by issuing coupons for another product made by the same producer. Over twenty food manufacturers have already bought into the system and other manufacturers must be monitoring this technological breakthrough which will be seen as a threat by some and an opportunity by others.

Questions

A. Outline THREE (3) possible advantages and TWO (2) disadvantages that ASDA, the Supermarket Chain, could experience with the use of the Catalina system as a business strategy. (10 marks)

B. Explain ONE (1) reason why this technological breakthrough (Catalina) could be seen as a threat by some manufacturers and an opportunity by others as cited in the case. (4 marks)

C. In developing its strategy, a company should, among other factors, take account of the environment. Outline THREE (3) ways in which ASDA had taken the 'environment perspective' into consideration.